Ranking the Strategies of Mining Sector through ANP and Topsis in a SWOT framework/Gavybos Sektoriaus Strategiju Rangavimas Taikant ANP, TOPSIS Ir SSGG Metodus

Azimi, Reza, Yazdani-Chamzini, Abdolreza, Fouladgar, Mohammad Majid, Zavadskas, Edmundas Kazimieras, Basiri, Mohammad Hossein, Journal of Business Economics and Management

1. Introduction

Organizations today deal with unprecedented challenges and opportunities in carrying out their vital mission. Managers always look for comprehensive picture of present situation of the organization and a clear understanding of its future organization. For this reason, they need background information of strengths, weaknesses, opportunities, and threats (SWOT) situation of the organization in order to invest the challenges and prospects of adopting organization. SWOT analysis is an effective framework for an organization (or a company) that helps to address the effectiveness of a project planning and implementation (Taleai et al. 2009; Podvezko 2009; Podvezko et al. 2010; Diskiene et al. 2008). SWOT analysis is used in different sectors such as maritime transportation industry (Kandakoglu et al. 2009; Ghazinoory, Kheirkhah 2008; Kheirkhah et al. 2009; Maskeliunaite et al. 2009), technology development (Ghazinoory et al. 2009, 2011), device design (Wu et al. 2009), food microbiology (Ferrer et al. 2009), Hazard Analysis Critical Control Point (Sarter et al. 2010), Environmental Impact Assessment (Paliwal 2006; Medineckiene et al. 2010), tourism management (Kajanus et al. 2004).

However, the factors that can affect the SWOT are complex and often conflicting. One way to overcome the problem of evaluation performance with regard to various factors is the use of multiple criteria decision making (MCDM). The assumption of independence of criteria is not always correct because in real world the criteria are often dependent with each other. Analytical network process (ANP) is an appropriate tool in order to model complex problems with all kinds of relationship, dependency and feedback in the model and draws a systematical figure of the decision making problem. Likewise, TOPSIS technique is a suitable tool to evaluate alternatives.

In this paper, we applied the SWOT analysis and two multi-attribute evaluation methods that are called the analytic network process (ANP) and TOPSIS techniques to rank the strategies of Iranian mining sector. Iranian mining sector has a critical role in Iran's economy. This sector had exports reaching $8.13 billion in 2009-2010, accounting for about 32 percent of the country's non-oil exports (1). This level of export of minerals marked 45 percent of total exports in the industrial and mine sector. Based on the fifth development plan, this sector should represent about 1.6% of GDP (Gross Domestic Product). For achieving the aim, it is necessary to suitable strategies be determined and their priorities in order implement should be evaluated.

The remainder of this paper is organized as follows. The SWOT analysis is explained in section 2. Then in Section 3, ANP method is introduced. TOPSIS technique is defined in section 4. In section 5, we define probable mining strategies in Iran. The evaluation of mining strategies and the steps of proposed method are summarized in section 6. And finally section 7 concludes the paper.

2. The SWOT analysis

The SWOT analysis has its origins in the 1960s (Kandakoglu et al. 2009). It is an environmental analysis tool that integrates the internal strengths/weaknesses and external opportunities/threats.

This method is implemented in order to identify the key internal and external factors that are important to the objectives that the organization wishes to achieve (Houben et al. 1999). The internal and external factors are known as strategic factors and are categorized via the SWOT analysis. Based on the SWOT analysis, strategies are developed which may build on the strengths, eliminate the weaknesses, exploit the opportunities, or counter the threats (Kandakoglu et al. 2009).

SWOT maximizes strengths and opportunities, and minimizes threats and weaknesses (Amin et al. 2011), and transforms the identified weaknesses into strengths in order to take advantage of opportunities along with minimizing both internal weaknesses and external threats. SWOT can provide a good basis for successful strategy formulation (Chang, Huang 2006).

According to the capability and efficiency of the SWOT analysis, this technique is applied to different aspects of strategic management. Nikolaou and Evangelinos (2010) employed SWOT analysis for environmental management practices in Greek Mining and Mineral Industry, their stated policy recommendations both for the government and industry which, if adopted, could facilitate improved environmental performance. Chang and Huang (2006) used SWOT analysis to assess the competing strength of each port in East Asia and then suggest an adoptable competing strategy for each. Stewart et al. (2002) employed SWOT analysis in order to present a strategic implementation framework for IT/IS projects in construction. Terrados et al. (2007) developed regional energy planning through SWOT analysis and strategic planning tools, they proved that SWOT analysis is an effective tool and has constituted a suitable baseline to diagnose current problems and to sketch future action lines.

Quezada et al. (2009) used a modified SWOT analysis in order to identify strategic objectives in strategy maps. Zaerpour et al. (2008) proposed a novel hybrid approach consisting of SWOT analysis and analytic hierarchy process. Misra and Murthy (2011) developed a SWOT analysis of Jatropa with specific reference to Indian conditions and found that Jatropa indeed is a plant which can make the Indian dream of self-sufficiency in energy-a reality. Chang et al. (2002) applied SWOT analysis in order to forecast the development trends in Taiwan's machinery industry. Wang and Hong (2011) proposed a novel approach to strategy formulation, which employs the theory of competitive advantage of nations (a revised diamond model), SWOT analysis and strategy matching using the TOWS matrix and competitive benchmarking. Leskinen et al. (2006) used SWOT analyses to form the basis for further operations that were applied in the strategy process of the forest research station. Halla (2007) employed SWOT analysis for planning strategic urban development. Taleai et al. (2009) proposed a combined method based on the SWOT and analytic hierarchy process (AHP) in order to investigate the challenges and prospects of adopting geographic information systems (GIS) in developing countries. Leung et al. (2011) developed a SWOT dimensional analysis technique which is able to integrate the strengths and weaknesses of overseas real estate developers and also the opportunities and threats found in the market for formulating their strategic plans and market positions.

3. Analytical network process (ANP)

Analytical hierarchy process (AHP) was introduced by Saaty (1980) that is a mathematical technique for multi-criteria decision making. This technique is based on pairwise comparison matrix.

ANP is the general form of the analytic hierarchy process (AHP), which is introduced by Saaty (1996) in order to solve problems involving interaction and feedback among criteria or alternative solutions. This method is able to consider network structures because many real world problems cannot be structured hierarchically. ANP is a general tool that is helpful in assisting the mind to organize its thoughts and experiences and to elicit judgments recorded in memory and quantify them in the …

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Publication information: Article title: Ranking the Strategies of Mining Sector through ANP and Topsis in a SWOT framework/Gavybos Sektoriaus Strategiju Rangavimas Taikant ANP, TOPSIS Ir SSGG Metodus. Contributors: Azimi, Reza - Author, Yazdani-Chamzini, Abdolreza - Author, Fouladgar, Mohammad Majid - Author, Zavadskas, Edmundas Kazimieras - Author, Basiri, Mohammad Hossein - Author. Journal title: Journal of Business Economics and Management. Volume: 12. Issue: 4 Publication date: December 2011. Page number: 670. © 2009 Vilnius Gediminas Technical University. COPYRIGHT 2011 Gale Group.

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